On August 27, the Department of Health and Human Services (HHS) published two important regulations related to coverage of contraceptive items and services.

Under a provision of the Affordable Care Act (ACA), most insurers are required to cover all FDA approved contraceptive items and services. When implementing this portion of the law, HHS provided an exception to this requirement for certain non-profit religious organizations.

HHS was subsequently sued by a significant number of privately held for-profit companies that argued that they should not be subject to this requirement because of the religious views of their shareholders. Cases involving two of these plaintiffs eventually made it to the Supreme Court.

On June 30, 2014, the Supreme Court ruled in the case of Burwell v. Hobby Lobby Stores, Inc. that, under the Religious Freedom Restoration Act of 1993 (RFRA), the requirement to provide contraceptive coverage could not be applied to the closely held for-profit corporations before the Court because their owners had religious objections to providing such coverage, and because the Government's goal of guaranteeing coverage for contraceptive methods without cost sharing could be achieved in a less restrictive manner by offering such closely held for-profit entities the accommodation the Government already provided to religious nonprofit organizations with religious objections to contraceptive coverage.

In light of the Court's decision in Hobby Lobby, HHS, along with the Departments of Treasury and Labor have proposed to amend the way in which they define organizations eligible for the exemption from the requirement to cover contraceptive items and services.

Specifically, they proposed to include among the exempt organizations, any closely held for-profit entity that has a religious objection to providing coverage for some or all of the contraceptive services otherwise required to be covered. Under the proposed rule, a qualifying closely held for-profit entity would not be required to contract, arrange, pay or refer for contraceptive coverage; instead, payments for contraceptive services provided to participants and beneficiaries in the eligible organization's plan would be provided separately by an insurance issuer (if the qualifying entity sponsors an insured group health plan, or if the qualifying entity is an institution of higher education that arranges student health insurance coverage) or arranged separately by a third party administrator (if the qualifying entity is self-insured).

The Departments seek comment on how to define a qualifying closely held for-profit entity. Under the first proposed approach, a qualifying closely held for-profit entity would be an entity where none of the ownership interests in the entity is publicly traded and where the entity has fewer than a specified number of shareholders or owners. Federal law contains precedent in defining such companies as those with 100, 45 and 10 shareholders.

Under a second, alternative approach, a qualifying closely held entity would be a for-profit entity in which the ownership interests are not publicly traded, and in which a specified fraction of the ownership interest is concentrated in a limited and specified number of owners. Precedent for this approach exists in federal regulations that name companies that are more than 50 percent owned by or for not more than five individuals.

Under the Departments' proposal, valid corporate action (or similar action by a business that is not organized as a corporation) taken in accordance with the entity's governing structure in accordance with state law, stating its owners' religious objection to providing some or all contraceptive coverage otherwise required to be provided, can serve to establish that a closely held for-profit entity has religious objections to providing such coverage.

In the impact analysis of this proposed regulation, HHS indicates it is anticipating that 71 for-profit organizations will seek an accommodation. This is based on the number of plaintiffs that are for-profit employers in recent litigation objecting on religious grounds to the provision of contraceptive services. Presumably there are other for-profit organizations that have not engaged in litigation but which would seek an exemption. It is not known how many such organizations exist.

In a related regulatory publication, HHS responded to a recent Supreme Court interim order by modified a requirement that exempt religious organizations fill out a specified form notifying the Departments of their religiously based objection to providing coverage for contraceptive items and services. In its revised regulation, HHS indicates that eligible religious organizations do not have to use the specified form, but do have to provide some type of written notice of their objection.

Comments on the proposed regulation are due on October 21, 2014. ACNM will prepare comments supportive of the proposal to extend the exemption for religious employers to the specified group of for-profit organizations.

With other members of the Coalition for Quality Maternity Care (CQMC), ACNM had commented on several issues in the proposed version of the regulation and CMS responded to comments in the final version.

CQMC comments supported the proposed use of the National Quality Forum's measure of the rate of early elective delivery in the Hospital Value Based Purchasing program, impacting hospital payments in 2017. Despite significant comments opposing the proposal, CMS chose to finalize its policy as proposed and include this measure in the Value Based Purchasing program. In justifying its decision, CMS extensively cited information provided in CQMCs comments.

CQMC comments also supported a proposal to include in the Inpatient Quality Reporting (IQR) system measures related to breastfeeding and the proportion of healthy newborns. CMS finalized its decision to do so, again citing information provided in the CQMC comments.

CQMC also supported the future inclusion into the IQR of a measure of the rate of cesarean births and CMS expressed thanks for that support. Hopefully the agency will propose inclusion of this measure into the IQR in a future regulation.

On September 2, ACNM submitted comments in response to the proposed CY 2015 Medicare Hospital Outpatient Prospective Payment System regulation. ACNM’s comments responded specifically to a proposal within this document related to physician certification of Medicare inpatient admissions.

Under existing requirements, all Medicare hospital admissions orders must be accompanied by a physician signed certification of the medical necessity of the admission. In implementing this requirement, many hospitals had applied it across their entire patient population, not just Medicare. Midwives who had previously been able to admit under their own names were thus forced to obtain a physician certification validating their orders.

ACNM staff, with representatives of the American Association of Nurse Practitioners met with CMS staff earlier this year to discuss this problem and although the agency clearly understood that the policy created a barrier for APRN care, they felt bound by the terms of the statute.

Under this proposal CMS has reversed course somewhat and would require physician certification only for hospital stays that are 20 days or longer. ACNM submitted comments strongly supportive of this proposal and providing suggested edits to the regulatory text to further clarify and support the proposal.

The regulation will be released in final form in early November. We expect that CMS will finalize their policy as proposed, which we anticipate will obviate the need for physician certifications related to almost all inpatient admissions ordered by CNMs/CMs. We will report on the content of that final rule when it becomes available.

On September 2, ACNM submitted comments in response to the CY 2015 proposed Medicare Physician Fee Schedule. This document is released each year by CMS to update parameters of their payment methodology and establish revised policies around services rendered by physicians and other practitioners.

ACNM confined its comments to a proposal by the agency to drop a quality measure related to early elective delivery from the set of measures that could potentially be reported under the Physician Quality Reporting System (PQRS).

Under the PQRS, eligible professionals select a few measures to report on from a large set of options. In the past, successful reporting has led to payment bonuses. At this point, there is no bonus for successful reporting, but failure to do so will result in a downward adjustment in Medicare reimbursement. Reporting through the PQRS is also being used by CMS as the basis of its Physician Value Based Payment Modifier. The Value Based Modifier goes beyond the PQRS by rewarding or penalizing practitioners based on performance.

CMS proposed removing a quality measure related to early elective delivery because it will no longer be maintained by its measure steward, the AMA-Physician Consortium for Performance Improvement. In its comments, ACNM pointed to data indicating that rates of early elective delivery, though falling recently, are still variable among hospitals. ACNM suggested that CMS consider replacing the measure they have proposed for removal with a similar one maintained by the Joint Commission.

The National Quality Forum (NQF), a body dedicated to developing and promoting measures that lead to higher quality health care, has released a document titled “Playbook for the Elimination of Early Elective Deliveries.” This document was developed by the NQF’s “Maternity Action Team” (MAT), a group which included ACNM.

The purpose of the Playbook is to help hospitals with high rates of early elective delivery (EED) reduce their occurrence. The document outlines the problem, lays out hospitals’ interest in reducing the rate of EED, discusses barriers to reducing the rate of EED and provides a set of tools that can be used to accomplish that goal. Also included are a number of case studies of organizations that have met with success in their efforts on that front. Among the tools included in the Playbook are ACNM’s some from Our Moment of Truth campaign and www.birthools.org.

NQF held a webinar to introduce the Playbook, in which ACNM staff participated. The webinar was recorded and can be accessed through the NQF site.

On August 22, the Drug Enforcement Administration (DEA) published a final regulation rescheduling hydrocodone combination products from schedule III to schedule II of the Controlled Substances Act. This action imposes the regulatory controls and administrative, civil, and criminal sanctions applicable to schedule II controlled substances on persons who handle (manufacture, distribute, dispense, import, export, engage in research, conduct instructional activities with, conduct chemical analysis with, or possess) or propose to handle hydrocodone combination products. The rule is effective as of October 6, 2014.

State laws and regulations often stipulate the types of drugs that CNMs/CMs can prescribe, as well as the conditions under which they may do so. To avoid potential penalties, ACNM members who have reason to prescribe hydrocodone combination products should be sure they understand what their state requirements say with regard to their ability to prescribe or administer schedule II controlled substances.

7. CMS Actuaries Project Growth in Health Care Spending

On September 4, the journal Health Affairs published an on-line article written by CMS' Office of the Actuary (OACT), projecting national health expenditures in the coming years. According to this article, in 2013 health spending growth is expected to have remained slow, at 3.6 percent, as a result of the sluggish economic recovery, the effects of sequestration (automatically imposed budget cuts), and continued increases in private health insurance cost-sharing requirements.

The combined effects of the Affordable Care Act’s coverage expansions, faster economic growth, and population aging are expected to fuel health spending growth this year and thereafter (5.6 percent in 2014 and 6.0 percent per year for 2015–23). However, the average rate of increase through 2023 is projected to be slower than the 7.2 percent average growth experienced during 1990– 2008.

Because health spending is projected to grow 1.1 percentage points faster than the average economic growth during 2013–23, the health share of the gross domestic product is expected to rise from 17.2 percent in 2012 to 19.3 percent in 2023. The rate of growth in national health expenditures has consistently outpaced that of GDP, according to the authors. Rates of growth for health care expenditure exceeding those of the GDP make reductions in reimbursement for providers more likely.

Medicaid, the most important payer for midwives, is expected to experience growth of 6.7 percent in 2013, with total expenditures of approximately $450 billion. Several factors contribute to this, including increases in primary care physician payments mandated under the ACA. In addition, the authors indicate states have increased provider reimbursement rates and expanded benefits. In 2014, Medicaid expenditures are projected to grow 12.8 percent as a result of Medicaid expansion. While Medicaid enrollment is expected to increase by nearly 8 million, per beneficiary spending is projected to decline by 0.6 percent in 2014 because most of the new enrollees are expected to be non-disabled adults and children who use less services than the aged and disabled populations.

8. Study Shows Hospitals Benefit from Medicaid Expansion

A study by Price Waterhouse Coopers, looking at hospital revenues concludes that “newly-released earnings and patient volume data reveal a distinct financial split between healthcare providers in states that have expanded their Medicaid programs and those that have not.” To assess the impact of Medicaid expansion, PwC’s Health Research Institute (HRI) analyzed financial data from the nation’s five largest for-profit health systems—HCA Holdings, LifePoint Hospitals, Tenet Healthcare, Community Health Systems and Universal Health Services, representing 538 hospitals in 35 states. The hospitals in this study report far better financial returns through the first half of the year than expected, owed in large part to expanded Medicaid, according to quarterly earnings reports filed this summer with the SEC.

The authors found that physicians, hospitals and health systems operating in the 26 states and the District of Columbia that pursued the option to broaden Medicaid coverage with federal dollars have seen a significant rise in paying customers and volume, while simultaneously experiencing dramatic reductions in their levels of uncompensated care.

The growth in Medicaid expansion states starkly contrasts the experience in the 24 states that did not expand the joint federal-state health program. In those states, hospitals continued to see flat or sagging admission rates and little reduction in the number of uninsured, largely non-paying patients.

Hospitals continue to be strong advocates for Medicaid expansion. Pennsylvania is the most recent state to expand its Medicaid program and there is potential that several other states may do so in the near term.

The impact of Medicaid expansion on midwives may not be as dramatic, because low income pregnant women were categorically eligible for Medicaid prior to the expansion. Where midwives might see a change is in the proportion of women covered by Medicaid seeking primary care and well woman services.

9. CMS Formalizes Implementation Date for Transition to ICD-10

On August 4, CMS published a final regulation establishing October 1, 2015 as the implementation date for the ICD-10 diagnostic code set. Legislation passed earlier this year, the “Protecting Access to Medicare Act of 2014,” specified that HHS not implement the ICD-10 code set any earlier than October 1, 2015. The regulation, thus lets the public know that despite having statutory authority to delay implementation beyond that date, the agency has opted to implement this code set as soon as possible.

The transition to ICD-10 is a very significant undertaking for providers, billers/claims clearinghouses and payers, all of whom will be required to be compliant with this requirement as of the established date. The bottom line here is that if you want to get paid, you need to know how to document and code. So it’s important to understand ICD-10. CMS has significant informational resources available online for those interested in learning about this transition.

In general, the ICD-10 code set is much more detailed than the ICD-9 version. An effort has been made to ensure much more comprehensive and granular description of conditions and diagnoses. In fact, some have found humor in the new code set, citing for example, new codes identifying injuries related to spacecraft and turtles. W22.02XA, “Walked into lamppost, initial encounter,” certainly does make one smile, though perhaps W22.02XD, “Walked into lamppost, subsequent encounter,” is even more amusing as the patient clearly did not learn from the “initial encounter.”

10. Forward this ACNM Policy Update to CNMs/CMs who are NOT ACNM members!

Some of you may be aware that about 58 percent of CNMs/CMs out there are ACNM members. That means a lot of midwives may not know about the activities of the association and our efforts to advance midwifery. I am tempted to point out that, tragically, they may be unfamiliar with the concentrated pure awesomeness contained in the ACNM Policy Updates, but am far too modest to indulge in such outrageous self-congratulation.

Joking aside, we want to be sure all midwives know ACNM is working on their behalf and that ACNM staff are thoroughly committed to the very important work you do. If you know CNMs/CMs who are not currently ACNM members, I would encourage you to forward this note to them as a small example of that commitment and as a way of demonstrating the value of membership.

Should you have questions about these issues, please contact Jesse Bushman, ACNM’s Director of Advocacy and Government Affairs at [email protected] or 240-485-1843.

Not an ACNM member? You can access all of the member benefits, including receipt of every ACNM Policy Update, by joining today.